Friday, July 13, 2012

How do you define 'win' in family cases?

Apart from the lawyers, who wins in family matters?
The search for something to fill the gap that, from next April, will be left by the abolition of legal aid for private law family matters continues. I have already discussed the suggestion by Nicholas Cusworth QC, chair of the Family Law Bar Association, that there be a community of marital property regime.

Now Marilyn Stowe has also come up with a suggestion: that the costs rules in family cases be amended to return to the old 'loser pays winner's costs' system, thereby allowing family lawyers to take up cases on a 'no win, no fee' basis, with the losing party paying a costs order set at the judge’s discretion. "There is currently little risk in litigating", says Marilyn, "but if that risk were to return it would lead to lawyers being far more circumspect and reduce the number of cases reaching court."

The idea could perhaps reduce the number of cases reaching court and enable some previously legally-aided litigants to obtain representation, although like Nicholas Cusworth's idea it would only apply to financial remedy cases, where money or property is involved.

However, I have always had a problem with the idea of 'winning' in financial remedy cases. I know that under the old costs system plenty of costs orders were made, but it is not always easy to define exactly where the line between 'winning' and 'losing' should be drawn. Obviously, a 'no win, no fee' system requires such a line in all cases.

OK, where it is a straightforward case of assets totalling £x, and the applicant seeking y% of £x, then it can be clear at the end of the case whether they have achieved y% or not. However, applicants often do not seek such a simple outcome - they will seek a proportion of the family home, a proportion of the other party's pension and a proportion of other assets, etcetera. They may also seek maintenance. Very rarely will they 'win' in each instance. If, for example, they get what they want on one out of two assets, have they 'won'?

Further to this, we are of course envisioning a Brave New World full of litigants in person, and even if one party is represented, the other party may not be. My experience of litigants in person suggests that they may just not know what they want, or whether the other party's claim is reasonable - simply continuing with the litigation so as to seek their 'day in court', when the court will make the decision for them. Without knowing what they want, how can one say at the end whether they have won or lost? I suppose there may be quite a few cases where the husband (for instance) will say that "she's not entitled to a penny", but if she gets a penny, does that mean he should pay her costs?

I don't wish to put a damper on things (we could certainly do with some ideas to fill the legal aid gap), and perhaps there is a place for 'no win, no fee' in family cases, but I'm just not sure of how it would work.

The other matter, of course, is that we would have to put up with yet more of those 'no win, no fee' adverts on television...

12 comments:

  1. Maybe some of the new funds for Bank Lending could be diverted for divorce costs; let it work a little like the Student Loan Scheme and you pay it back, potentially with interest, when your house sells. Oops, forgot - that's how the soon to be cut-short legal aid for financial remedy cases currently works!

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    1. A loan scheme whereby you repay when your house sells? Now you're just being silly...

      :-)

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  2. You are definitely being silly when one party gets the house and the other party is lucky if he can afford rented accommodation.

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    1. Please keep comments relevant to the subject of the post.

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  3. The divorce system is already very adversarial, labeling one party the 'winner' and the other the 'loser' will only make things worse and may damage relations between the couple further which may have a negative effect on any children (plus I'm with you on the adverts!). I agree something nees to be done. Perhaps better guidance for litigatants in person, at least until we can final a more permanent solution. Or a costs system based more on the conduct of the parties than the financial outcome. Giving judges some guidance as to how to summarily assess conduct in relation to divorce costs might help to keep further litigation to a minimum? Just some ideas...

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    1. Thanks for that. I certainly agree that labelling one party 'winner' and the other 'loser' would only make things worse - we need to encourage litigants not to think in terms of winners and losers.

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  4. Hi John
    Thanks very much for your post. You make some interesting points and in particular, you ask what is a win?
    I should make it clear that I am not a supporter of what has happened to costs in civil litigation in terms of no win no fee. I believe it has got wildly out of hand. In any event, family law is and will always remain a different area entirely and different principles should apply.
    However:- 
    1.  There was much criticism of the previous rule where costs followed the event usually directed at the size of the successful lawyers' fees. I think controlling the recoverable costs from the other side, is a different argument.
     The 'no order' rule however has had a dire impact and i believe to be generally more flawed than the old rule. I believe there is a direct correlation with the introduction of the 'no order' principle in financial cases and the rise in self representing litigants across the family courts. There is no incentive to many people where money is tight to instruct a lawyer if there is no realistic prospect of recovering costs.
    2.  I am constantly hearing of cases where the weaker party has 'succeeded' in that she (usually it is the wife) has easily beaten the offer made by the financially stronger party, in fact the stronger party may have made no offer at all, but the result for the wife is ultimately skewed by the 'no order' costs rule. Only in the most rare of cases is a party ordered to pay costs now. This is unsatisfactory in terms of time and stress for the weaker party, who had to incur substantial costs to litigate to a final hearing and sees her costs taken out of her share.
     It is also unsatisfactory for the swifter disposal of cases to clear a backlog.
      A change in the costs rules, would equally apply a risk to the weaker litigant who rejects a reasonable offer that is less or the same as at the final hearing.
     The rule that costs follow the event still applies to Inheritance Act and Trusts of Land Act cases. 
    All these cases are examples where both parties can still afford legal representation.
    3. In less well off cases, i.e. the vast majority of people, the problem is even more acute. Consider an average but typical case where the wife wishes to stay in the house, she can only work part time, she has underage children. She could apply for spousal support and a transfer of property order or a Mesher order. Husband earns more and can afford a lawyer. Wife doesn't qualify for legal aid (shortly to become irrelevant anyhow) and she has insufficient income/ no available capital to pay a lawyer. Husband cant afford to pay two sets of fees. How does she obtain legal representation without a sale of the house? A lawyer wont act if he has no prospect at all of getting paid. Husband presses wife for a sale. He wants his share of the equity. She wrongly believes the court will split the equity 50/50 and ignore her needs.
     She agrees to a sale and will probably end up in council accommodation (if she can get it) with the children, ultimately living on benefits. I can easily see such cases rapidly increasing when legal aid is abolished unless something is put in it's place. 
    If the costs rules were changed, the playing field would be evened up, lawyers would be more likely to represent the weaker party where litigation was inevitable and cases would thus be more likely to settle. At the moment as there is no compelling incentive to settle, courts are bursting at the seams.
     Finally, I agree with you about names. 'Streamlining,' ' gateways,' ' pathways,' ' modernising' etc:-  the fundamental root problem is about enabling swift access to justice, usually through the court, advised and represented by specialists for all who require it.  
    Best wishes
    Marilyn

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    1. Hi Marilyn,

      Many thanks for that.

      You make some good points (of course!). In particular, I agree that parties should be made to think very carefully before they take a matter to court, although if costs were the 'risk', we would still be left with the question of how to determine a 'win'.

      Glad you agree with me about modern jargon!

      Best,

      John

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  5. Easy, a 'win' should be defined as reaching a settlement with which all parties are happy and consider fair.

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  6. And a loss should be defined as adamantly refusing to consider a proposal which anyone in their right mind would consider fair. Anyone in their right mind.........I wonder how we're going to define that?

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